In a comment, Fred says that "university degrees function for employers as proxies for IQ testing, which is made difficult by Griggs vs. Duke Power." Fred is not the first person to make such a claim, but I do not believe it accurately explains why employers use degrees to make hiring decisions.
I agree that hiring based on degree does have the effect of making it more likely that those with higher IQs get into the better career tracks. But is this the reason why employers look at degrees? Because they would rather use IQ tests but aren't allowed to?
The average educated person, trained in their beliefs by the liberal media and liberal college professors, believe that IQ measures nothing but the ability to take an IQ test. Employers' beliefs are no different than those of the average educated person. If employers are not using standardized tests, it's not because they are legally prohibited, but because they don't believe in them. The laws usually reflect the beliefs of the majority. If there was a huge groundswell of support for using IQ testing, the laws would be changed. Ask any person who works in HR (usually a member of the less logical sex), and she will tell you that she doesn't believe that IQ tests measure anything useful.
The law, originally set forth by the Supreme Court but codified in the Civil Rights Act of 1991, prohibits the use of an "employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity."
A federal appellate court upheld the use of a written exam for qualifying police officers (Bew v. City of Chicago, 252 F.3d 891 (7th Cir. 2001)). The court, quoting Griggs, used a rather loose definition of "necessity": "To satisfy the standard, an employment test must 'bear a demonstrable relationship to successful performance of the jobs for which it was used.'" Of course, the standards are rather murky, lacking in enough court cases to truly know what's a "necessity," but there is little desire by employers to push the envelope, not just for fear of litigation, but because they don't believe in IQ tests.
Why is it OK for employers to require a college degree? A lower percentage of blacks have college degrees compared to whites. Using college degrees as a hiring requirement pretty clearly has a disparate impact on blacks. According to the U.S. Census, 30.0% of non-Hispanic whites age 25 or older have a college degree compared to only 17.3% of blacks. I guess the reason it's OK to use college degrees as a hiring requirement is because everyone knows that college is really important and the reason it's not OK to use IQ tests is because everyone knows that IQ tests measure only the ability to take the IQ test.